Mr. Speaker, the people in my riding are asking themselves some serious questions. A year ago, a barrel of oil was worth $73, and gas sold for $1.06 at the pump in Quebec. Today, gas sells for $1.15, while the price of a barrel of oil is much lower, at $61. If a barrel was worth $73 a year ago, how is it that a year later, when it is $61 a barrel, we are paying more for a litre of gas? The difference lies in the refining margin. While a reasonable refining margin is 4¢ to 7¢ a litre, last March and April it was over 15¢ a litre. As well, it climbed to 23¢ a litre last week, four times the reasonable margin.
There are four factors that can explain the rise in gas prices: the price of crude oil, the refining margin, taxes and the retail margin. The latter varies from 3.5¢ to 6¢ a litre, depending on the region. Apart from that, the retail margin is stable.
Some will say that this is because of taxes, but taxes are also stable: the excise tax is 10% and the GST is 6.5%. The same is true at the provincial level. Taxes are not what make oil prices fluctuate.
Refining, on the other hand, is a different story. To reduce their costs, the oil companies have closed a number of refineries, and as a result have been able to increase their production capacity. The gap between supply and demand has narrowed, and so the slightest weather-related or technical problem leads to a price increase to maintain the balance between those two factors.
As my colleague from Montmorency—Charlevoix—Haute-Côte-Nord said, long weekends and vacations are not unforeseen events. And yet the oil companies do not seem to be able to prepare for them. One would think they were unaware that such events will occur and the price will fluctuate. And yet every year, and every time there is a vacation period or statutory holiday, we see their prices go up.
Can we imagine a small businessperson failing to keep any inventory in the lead-up to Christmas, and then claiming scarcity to raise prices? He or she could do just that; that is what we are experiencing, and yet it is the oil companies doing it. Because they sell an essential product and there is little competition, they make off with it all, while we depend on them.
We can conclude that the inability of the refining industry to overcome the slightest hitch is responsible for recent increases. Is that situation intentional or not? We do not know, because the Competition Bureau does not have the tools that would enable it to carry out a serious, complete investigation; and that is the reason for our motion today.
One thing is certain, however: the structure of the oil industry encourages precipitous price increases and provides the opportunity for abuse. That is why it must be monitored. In Halifax, Esso refines for all the companies; in New Brunswick, it is Irving; in Quebec City, it is Ultramar; and in Montreal, it is Petro-Canada and Shell. The refineries have all cut their gasoline supplies, and in so doing have caused the price to climb about a month earlier than usual.
However, the oil industry is making huge profits. Some may say that the oil companies are not making money, but let us look at the profits they are making. Petro-Canada made a net profit of $590 billion in the first quarter, which is twice as much as the $206 billion it posted last year. It doubled its profits in a year. ExxonMobil took in an enormous net profit of $9.3 billion for the first three months of 2007 alone, which is a 10% increase over the same period last year. However, its sales were down 2% because the market price of oil went down. As I was saying earlier, the price per barrel of oil went from $73 to $61.
How was ExxonMobil able to exceed the record profit of $39.5 billion it posted in 2006? Thanks, in large part, to its refining margin which increased substantially. If the price per barrel of oil goes down, the oil companies lose a bit of money. They then increase the refining price in order to more than compensate for any loss.
The gas crises may be a result of lack of competition in the oil industry. The three largest refiner-marketers have 75% of the market share. The five largest represent 90% of the market. The net profits combined of the six major integrated oil companies in Canada, Imperial Oil, Shell Canada, Husky Energy, Petro-Canada, EnCana and Suncor, reached $12 billion in 2006. In three years, they doubled their profits. It is incredible. The net profits of the entire oil industry have gone from $17 billion in 2003 to $20 billion in 2004 and $35 billion in 2006. That is a 100% increase. After all that, they complain when we want to take back a bit of that money. Give me a break!
Furthermore, the oil companies that are investing in tar sands development in Alberta—the representative of the governing party and especially the Parliamentary Secretary to the Minister of Industry were wondering about that—can deduct 100% of their investments from their income from the first year onwards. They can invest a dollar and deduct it the same year. It does not cost them much; things are going all right for them; life is beautiful.
A recent study prepared by the Canadian Association of Petroleum Producers did a three-year projection of the impact of all the tax breaks given to oil companies. I am talking about breaks, but we could call them gifts. In 2005 they paid $5.1 billion in taxes; in 2008 they will pay $2.3 billion. The income tax they pay has been cut in half. These are tax breaks from this government. We have to get our feet back on the ground. This is a federal income tax reduction of 54%. I would like all the citizens of Quebec to receive such tax reductions, not just the oil companies. The Bloc Québécois has often criticized these tax breaks for oil companies, but no one has made a move. It is time to do so now.
There are proposed measures for disciplining the industry. First of all the Competition Act must be strengthened. I am going to target the Parliamentary Secretary to the Minister of Industry again. Because he misunderstood, I am going to explain to him so that he understands. The Competition Bureau cannot conduct an investigation on its own initiative; it must receive a complaint or a request from the Minister of Industry, who will doubtless be asleep again, since has been asleep at the switch all this time.
The Competition Bureau is sorely lacking in powers when it conducts a general review of the industry: it cannot summon witnesses. How can it operate? The bureau cannot even summon people as witnesses to find out whether there is any collusion. That is not right. It cannot ensure their protection so as to get them to talk. They cannot even be summoned, they cannot even be protected so that they will tell the truth. And then we are told that the Competition Bureau can do its work. Somebody should wake up. There is something missing here.
Without these tools, it is almost impossible to prove collusion or any other anti-competitive practices. And even when competitors reach an agreement, the burden of proving collusion is on the Competition Bureau. Imagine that! This is a long way from burden of proof reversal. But that is what is being asked for.
We must reinforce the Competition Act by giving real powers to the Competition Bureau.
Near the end of its mandate, the Liberal government introduced Bill C-66, which was for the most part inspired by a comprehensive plan tabled one month earlier. That bill died on the order paper. Why? Because, once again, the Conservatives did nothing.
When Konrad von Finckenstein, the competition commissioner, appeared in front of the Standing Committee on Industry, Science and Technology on May 5, 2003, he identified the following shortcomings in the Competition Act:
—while the bureau's mandate includes the very important role of being investigator and advocate for competition, the current legislation does not provide the bureau with the authority to conduct an industry study.
It seems to me that it would be preferable to have a study on the overall situation carried out by an independent body that would have authority, that would be able to summon witnesses and gather information. It should also have the power to protect confidential information that someone is not necessarily going to want to share, but which would be vital in order to reach a conclusion based on the real facts.
Hence, the motion from the Bloc:
That, in the opinion of the House, the government should move an amendment to the Competition Act so that the Commissioner of Competition have the power to initiate investigations of the price of gas and the role of refining margins in the determination of the said price.